Forrest shunned Fairfax stake: biography

Andrew Forrest is described as a swirl of contradictions.
Photo: Dom Lorrimer

by
Eric Johnston

Andrew Forrest
knocked back a chance to acquire a key stake in
Fairfax Media
in 2011, paving the way for billionaire
Gina Rinehart
to emerge as the single biggest shareholder in the publisher, according to an unauthorised biography of the mining magnate.

The book reveals the
Fortescue Metals Group
chairman chatted informally with Tony Abbott about joining the ­Liberal Party with the prospect of ­entering Parliament.

However, unnamed friends say taking a back seat to the Prime Minister would slowly kill the mining magnate as he would ‘‘only ever have aspirations to become prime minister’’.

Twiggy: The High-Stakes Life of Andrew Forrest, by Perth-based journalist Andrew Burrell, portrays a figure of contradictions from the rebellious student whose business drive was deeply influenced by the fast money Perth stockbroking scene of the 1980s, to the church-going Christian who more recently made what is believed to be the largest single philanthropic donation in Australia.

Forrest opposed biography

The book outlines the rise and fall and rise again of Mr Forrest and the iron ore miner he founded in his living room. It claims that when his mother discovered she was pregnant with Mr Forrest in 1961, her first thought was to plan a miscarriage – the hard work of ­living on a remote sheep station in the Western Australian outback with two children didn’t include room for a third child.

She rode bareback across the Pilbara every day for a week. The book claims she jumped from the roof of the homestead ‘‘three times a day for seven days’’ but gave birth seven months later.

Mr Burrell said Mr Forrest declined to co-operate with research and declined to be interviewed.

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Mr Burrell says that Mr Forrest instructed family members and some close friends not to talk to him.

‘‘Forrest’s opposition to this book greatly surprised many of those who know him well,’’ he said in an author’s note.

Philanthropy a win-win

Mr Forrest, a University of Western Australia graduate, has said that astronomical personal wealth brings problems, which he believes can be balanced by equally large generosity.

An unnamed former Fortescue executive is quoted as saying that while Mr Forrest genuinely believes in the various causes he champions – including indigenous development – that his philanthropy is also good for commercial interests. The unnamed executive is quoted as saying that Mr Forrest is well aware it ‘‘opens doors, particularly with politicians’’.

Investment banker John Poynton says Mr Forrest will be one of the ‘‘world’s greatest philanthropists’’.

A former business partner, Warwick Grigor, maintains the philanthropy is genuine, but believes the motivations lay in part from a ‘‘sense of guilt’’.

“You can’t be a good Christian, do all that he’s done and not want to recompense for that,’’ he said.

Fortescue is the world’s fourth-biggest iron-ore exporter with a market capitalisation of $16.6 billion. Mr Forrest’s stake amounts to about one-third. With much of Fortescue’s expansion funded with debt, the company remains reliant on iron ore prices ­holding up.

Mr Forrest had to dramatically scale back expansion plans and made savage cuts when iron ore plunged to less than US$90 a tonne in September last year. It is now trading at more than US$130 a tonne. Hundreds of staff were cut in a single day, including a project aimed at improving living conditions for Aboriginal people. Several of Mr Forrest’s most loyal executives were axed.

Prone to exaggeration

The book says Mr Forrest threw a party at his Cottlesloe home to celebrate last year’s High Court victory against the corporate watchdog. The Australian Securities and Investments Commission alleged he misled investors over contracts with Chinese steel mills.

The book quotes an unnamed friend as saying ASIC’s case was mostly built around Mr Forrest’s inability to re-tell a story without exaggerating.

‘‘Seventy per cent of what he says is correct, the other 30 per cent is froth,’’ a former Fortescue executive said.

Among the guests at the party were three former Fortescue executives who had been axed from the company just days earlier as part of a cost cutting drive. The book said that Mr Forrest’s son Sydney entertained guests by playing the saxophone while Mr Forrest thanked everyone, saving his biggest praise for God who he said had helped him win the case.